Jesse Saivar

If your business operates online and uses common marketing tools, your business is at risk of being targeted for lawsuits under pre-internet wiretapping and video rental privacy laws. It is critical to address and mitigate risk before these claims are filed.  With few exceptions, modern data privacy laws such as California's CCPA do not give consumers the right to sue businesses directly for privacy violations. Instead, the plaintiffs’ bar has turned to pre-internet laws to assert privacy claims against websites. The result? A huge upswing in lawsuits and demands against websites based on alleged violations of anti-wiretapping provisions of the California Invasion of Privacy Act (“CIPA”) and the Video Privacy Protection Act (“VPPA”). Key Information on the Most Common Consumer Data Privacy Claims The anti-wiretapping and two-party consent provisions of CIPA prohibit intentionally intercepting or accessing the content of a communication without the consent of all parties involved. The wiretapping provisions in CIPA were first passed in 1967 and are facially focused on the tapping of telephone lines. Recently, enterprising plaintiffs’ attorneys have argued, with some success, that third parties that collect data or facilitate communications with customers can be construed as “wiretappers” under the statute. Such internet CIPA claims typically target the use of “pixels,” like those provided by Meta or TikTok, chat services, and “session replay” technology, that provides information on customer behavior on a website. If your site uses common third-party tools to interact with consumers or collect consumer data, your business is at risk of a CIPA claim. The VPPA was passed in 1988 after Supreme Court nominee Robert Bork’s video rental history surfaced during his 1987 confirmation hearings. Under the VPPA, a “videotape service provider” cannot disclose information that identifies any of its purchasers, renters, or subscribers without receiving consent that is separate from any other contract between the business and the customer. While Blockbuster locations may have disappeared, VPPA claims have recently proliferated. Plaintiffs’ attorneys are increasingly arguing that web sites and other technologies that transmit video to consumers are subject to the VPPA, and that the use of pixels, session replay, and other common marketing data tools constitute violations of the VPPA. If your site embeds video that’s served from a third-party host (like YouTube) or delivers video in a subscription form, including email newsletters, you are at risk of a VPPA claim. The upsurge in data privacy litigation is exemplified in a recent decision in which a federal appellate court allowed a case under the VPPA to proceed against the NBA. The NBA case makes clear that courts are going to permit consumers to use the VPPA to assert data privacy claims, and that businesses need to proactively mitigate their risk and exposure under the VPPA. Best Practices for Avoiding These Claims Following these best practices should reduce the risk of increasingly common CIPA claims: Full Disclosure and Consent: For CIPA, a banner or click-through consent that links to your privacy notice and user agreement can provide the basis for a strong consent defense. For VPPA, the consent provisions are narrowly drawn, so a separate consent agreement is needed. Contracts: Ensure agreements with providers prohibit using your users’ data for anything other than fulfilling their obligations to you. A solid Data Processor Agreement (“DPA”) or CCPA-compliance clause will typically cover this. Route Data Through You: Configure tools to collect data through your business. Routing data through your business’ servers first defeats the core interception element of a wiretap claim. Review Your Terms: Arbitration clauses are very common and can be helpful to businesses. However, when combined with a waiver of class actions, they could cause your business to fall into the “arbitration trap” in which it is required to defend thousands of claims in a “mass arbitration” rather than consolidating them into a class action. This trap is costly because arbitration filing fees are typically charged on a per claimant basis, and in states where the business is required to pay all, or most, of the fees, a claim with thousands of claimants can yield millions of dollars just in arbitration filing fees. With a few tweaks to an arbitration provision, including providing for the batching of claims, an online business can obviate some of the risks posed by common arbitration clauses. How Greenberg Glusker Can Help The best solution is prevention. At Greenberg Glusker, we can help you diagnose risks, choose smart providers and make consents as frictionless as possible. We can also draft, overhaul, or refresh your user agreement and privacy notices. If you receive a demand or claim, litigators within our Consumer Claim Defense Task Force can litigate the claim, whether your goal is to contest the claim to trial or settle it. Our litigators square off against many of the most prominent plaintiffs’ firms in this area and have experience efficiently investigating, responding, and resolving the claim. If you have any questions, please reach out to Jesse Saivar or Ira Steinberg. We are here to help you understand and comply with privacy obligations.

The Los Angeles area is home to iconic food innovators, family-run restaurants of every ethnic stripe, and competition-winning restaurateurs. A successful restaurant or food and beverage company is also a business enterprise associated with high risks, hard-earned rewards, and the need to comply with numerous federal and state regulations. Our Restaurant, Food & Beverage Law Group provides trends to assist you with your growing business.  This was originally published in the Los Angeles Business Journal Food and Beverage Outlook - A Legal Perspective A SURGE IN TRADEMARK APPLICATIONS – PLAN AHEAD The USPTO recently announced thatThe USPTO recently announced that trademark applications have surged to unprecedented levels in recent months. As of June 2021, the increase is roughly 63% over last year. One of the consequences of this drastic increase is that, whereas historically, a newly filed trademark application was examined by a PTO attorney 3-4 months after the application was ÿled, it is now taking about 6 months (or more!) for that initial examination to take place. This means that if you are planning to open a new restaurant or food business, and have filed a trademark application for the name and/or logo of your new venture, you will need to take into consideration that you may not know whether your trademark application will be approved or not by the time you are ready to launch. -Natasha Shabani, intellectual property attorney THE PANDEMIC HAS CHANGED REAL ESTATE CONTRACTS As a result of lessons learned from the stay-at-home orders, retail tenants have become emboldened in negotiations, requiring rental abatement in leases should governmental orders result in their inability to operate entirely or at full capacity. This trend started with large, multi-location restaurants and quick-service tenants, and is now a frequent ask even with smaller retail tenants. Going forward, tenant abatement rights that were written speciÿcally with COVID-19 in mind may apply to use and occupancy limitations from any governmental order in order to hedge against future shutdowns.  - Sarkis Haroutunian, real estate attorney ACRYLAMIDE & PROP 65 WARNINGS It has thus far been a noteworthy year for acrylamide, a Proposition 65-listed sub-stance that naturally forms in the cooking  and heating of many plant-based foods.°Both the courts and the California Ofÿce of Environmental Health Hazard Assessment  (OEHHA) appear to be responding to a proliferation of Prop 65 acrylamide lawsuits. In the first quarter of 2021, there were 109 60-day notices issued to companies based on failure to warn for acrylamide. In March, a federal district court judge issued a preliminary injunction temporarily barring Prop 65 acrylamide lawsuits based on the failure to warn for cancer risk. However, the Ninth Circuit recently stayed the preliminary injunction pending an appeal of the injunction, meaning these suits can be filed again. In addition, OEHHA is in the process of a regulatory rulemaking potentially amending the Prop 65 regulations to specify new safe harbor levels for certain classes of heat-pro-cessed foods, which would potentially eliminate Prop 65 warning requirements for foods created by cooking or heat processing if the producer, manufacturers, distributor or holder of the food has utilized quality control measures that reduce the chemical to the lowest level currently feasible. The new regulation would also specify acrylamide safe harbor levels for a variety of food categories, such as almonds, bread, crackers, and potato products. While relief may be near, be aware of this rapidly evolving landscape. - Sherry Jackman & Sedina Banks, environmental attorneys  LABELING OF PLANT-BASED MEAT PRODUCTS Of the recent trends that have emerged in the false advertising space involves the labeling of plant-based meat products. Several states have passed laws dealing with these products, with proponents saying consumers may be misled into believing they contain actual meat. At least one federal court has held even where the term ‘vegan’ appears on the label, a false advertising claim may still lie because hurried shoppers may not scrutinize the packaging before purchasing, especially where the label otherwise contains traditional meat terminology (e.g., “Classic Burger, “meatballs,” and “chorizo”). Companies offering products in this space should therefore avoid relying on fine-print disclaimers and ensure that the plant-based nature of their products is conspicuously disclosed. In addition, traditional meat terminology should be avoided in favor of more transparent choices, such as “chik’n,” “veggie bacon strips” or “beefless crumbles.” - James Molen, business litigation attorney CONDUCT PERIODIC EMPLOYMENT PRACTICES AUDITS The health of a company’s personnel practices and policies is often an unsung anchor to an M&A deal. Conducting due diligence on employment practices and documentation before a potential sale, especially with the benefit of confidential legal review, is important in aiding the founders to get the most value from their life’s work and increase attractiveness to a buyer. It is strongly recommended to conduct a periodic employment practices audit to assess legal liability exposure, especially once the company is established enough to consider investment or sale. This audit includes, but is not limited to: ensuring all of your employment relationships are properly classified; confirming whether all employees have current written terms of employment; identifying any key employees who were part of the founding or major growth; determining if arbitration agreements exist for all employees, and checking for a compliant employee handbook. In today’s market, where competition is swift and deals move quickly, it is essential to audit and update your employment practices to facilitate a smooth and profitable sale. - Karina Sterman, employment attorney VIRTUAL DINING EXPERIENCES With the struggles endured by restaurants during the pandemic corresponding with the proliferation of food delivery services, we saw the birth of the “virtual dining” experience. Celebrities and well-known brands license their IP to create a branded, online-only restaurant that delivers through food delivery apps. The food is prepared by a variety of local restaurants, sourced by the “virtual dining” provider, that are supplied with the recipes, ingredients, and branded packaging. Users can buy a hamburger from their favorite celebrity without realizing that it was actually cooked by the Indian restaurant down the street. Brands have gotten involved not only to expand their reach but also to help support local restaurants by providing them with an additional income stream. However, celebrities and brands need to ensure they have sufficient approvals/controls so that if any of the local restaurants aren’t meeting quality control standards, they have the ability to remove them from the pool of participating restaurants. In addition, assuming all goes well, they need to reserve rights that would allow for the launch of a branded brick-and-mortar restaurant. - Jesse Saivar, intellectual property attorney